The deal is worth $25.5 million guaranteed. The two option years will pay Archer about $9 million and $11 million, with the total contract maxing out at $43.75 million for all eight seasons.
"For any kid who's been told in life you can't do something in life, you can. I'm living proof of that," Archer said during the news conference to announce the deal.
Archer, 25, went to Tampa Bay from the Cubs in December 2011 as part of an eight-player trade that sent Matt Garza to Chicago. The right-hander was 9-7 with a 3.22 ERA and 101 strikeouts in 23 starts last season and finished third in American League Rookie of the Year balloting behind teammate Wil Myers and Detroit shortstop Jose Iglesias.
Archer is the second member of Tampa Bay's young rotation to sign a long-term contract extension that buys out his remaining salary arbitration years and several years of free agency. In December 2011, Matt Moore agreed to a guaranteed five-year, $14 million contract that could extend to eight years and about $40 million if the Rays exercise their three option years.
"When we make a long-term commitment to a player, we look not only at his talent but also his intangibles," Andrew Friedman, Rays vice president of baseball operations, said in a statement. "There's no question Chris has the talent to develop into a top-of-the-rotation starter, and he has the drive and character to realize that potential. We are very pleased to solidify his place as one of our core players for years to come."
Talks on the new deal began during spring training. Archer said he consulted with a number of people during the process, including some players who've signed long-term deals early in their career and some who turned it down.
"What came from it is never turn your back on your first fortune," said Archer, adding that he feels blessed to be in a position to make sure his parents become debt-free. "At the end of the contract, there's still room to sign another deal or extension or whatever it might be. From where I come from, this is more than I can ever ask for, to be honest."
The Associated Press contributed to this report.